Cyprus house prices continue to rise.

Construction costs and housing demand continue to support high property prices in Cyprus. According to a Central Bank of Cyprus (CBK) report released this week, house prices continue to rise in the fourth quarter of 2022 due to higher construction costs and rising demand. The CBC's Residential Property Price Index (RPPI), which includes houses and apartments, recorded both quarterly and annual increases in the fourth quarter of 2022. Price increases were particularly noticeable in the districts of Limassol, Paphos and Larnaca, likely due to the concentration of foreign demand in these areas. House price growth was particularly high in Paphos at 10.4%, while apartment prices rose in Limassol (9.3%), Larnaca (9.4%) and Paphos (8.6%).

B'''The fourth quarter of 2022 residential real estate price index (houses and apartments) increased by 1.6% compared to the previous quarter. The index increase was driven by a 2.1% increase in apartment prices and a 1.1% increase in house prices during the same period. Annualized house price growth was 6.6% in the fourth quarter of 2022, up from 6.3% in the third quarter. The central bank said the increase in house prices was "supported by ever-increasing construction costs, although their growth is slowing, as well as increased demand in the real estate market.

In addition, the CBK reported an increase in demand in the real estate market at the end of 2022, which was also reflected in the record sales figures according to the Department of Land and Listed Rights (DLS). In fact, they approached the levels seen''s second quarter of 2019, which saw the highest level of sales in a decade. The report also indicates that 'construction activity remains subdued, possibly due to the continued rise in construction costs'. It also notes that "the increase in key ECB interest rates and the associated decline in demand for mortgage loans have not had a significant impact on real estate demand. "

In terms of house prices by district, the CBK notes that in the fourth quarter of 2022, house prices on a quarterly basis increased in all districts except Famagusta. Namely, Nicosia had a slight increase of 0.3%, Limassol 2.5%, Larnaca 2% and Paphos 2%, while Famagusta slightly decreased by 0.8%. Annual price changes for